*Identifies loans to borrowers located primarily outside of the Bank’s market footprint.

**Total loans are presented inclusive of premiums, discounts and net loan origination fees and costs. See table directly below for expanded detail.

The following table reconciles the contractually receivable and carrying amounts of loans as of December 31, 2021 and 2020:


December 31, (in thousands)	2021		2020

Contractually receivable	$	4,498,671	$	4,821,062
Unearned income		(542)		(708)
Unamortized premiums		116		216
Unaccreted discounts		(641)		(988)
PPP net unamortized deferred origination fees and costs		(1,203)		(8,564)
Other net unamortized deferred origination fees and costs		161		2,085
Carrying value of loans	$	4,496,562	$	4,813,103

Paycheck Protection Program

The CARES Act was enacted in March 2020 and provided for the SBA’s PPP, which allowed the Bank to lend to its qualifying small business clients to assist them in their efforts to meet their cash-flow needs during the COVID-19 pandemic. The Economic Aid Act was enacted in December 2020 and provided for a second round of PPP loans. PPP loans are fully backed by the SBA and may be entirely forgiven if the loan client uses loan funds for qualifying reasons. As of December 31, 2021, net PPP loans of $56 million remained on the Core Bank’s balance sheet, including $15 million in loan balances originated during 2020, $42 million in loan

balances originated during 2021, and $1 million of yet-to-be-earned PPP lender fees reported as a credit offset to these originated balances.

To provide liquidity to banks administering the SBA’s PPP, the FRB created the PPPLF, a lending facility secured by the PPP loans of the participating banks. As of December 31, 2021, the Bank had no outstanding borrowings from the FRB under the PPPLF.

Credit Quality Indicators

Bank procedures for assessing and maintaining credit gradings differs slightly depending on whether a new or renewed loan is being underwritten, or whether an existing loan is being re-evaluated for potential credit quality concerns. The latter usually occurs upon receipt of updated financial information, or other pertinent data, which would potentially cause a change in the loan grade. Specific Bank procedures follow:

●

For new and renewed C&I, CRE and C&D loans, the Bank’s CCAD assigns the credit quality grade to the loan.

●

Commercial loan officers are responsible for monitoring their respective loan portfolios and reporting any adverse material changes to senior management. When circumstances warrant a review and possible change in the credit quality grade, loan officers are required to notify the Bank’s CCAD.

●

A senior officer meets at least monthly with commercial loan officers to discuss the status of past due loans and possible classified loans. These meetings are designed to give loan officers an opportunity to identify existing loans that should be downgraded.

●

Monthly, members of senior management along with managers of Commercial Lending, CCAD, Accounting, Special Assets and Retail Collections attend a Special Asset Committee meeting. The SAC reviews C&I and CRE loans graded Special Mention or worse or loans potentially subject to downgrade into these classifications and discusses the relative trends and current status of these assets. In addition, the SAC reviews all classified and potentially classified residential real estate and home equity loans. SAC also reviews the actions taken by management regarding credit-quality grades, foreclosure mitigation, loan extensions, deferrals or forbearance, troubled debt restructurings, and collateral repossessions. Based on the information reviewed in this meeting, the SAC approves all specific loan loss allocations to be recognized by the Bank within the ACLL analysis.

●

During 2021 and 2020, members of senior management performed periodic reviews, no less than monthly, of loans whose borrowers were negatively impacted by the COVID-19 pandemic. These reviews included borrowers in industries particularly harmed by pandemic-driven restrictions, such as the hospitality industry.

●

All new and renewed warehouse lines of credit are approved by the Executive Loan Committee. The CCAD assigns the initial credit quality grade to warehouse facilities. Monthly, members of senior management review warehouse lending activity including data associated with the underlying collateral to the warehouse facilities, i.e., the mortgage loans associated with the balances drawn. Key performance indicators monitored include average days outstanding for each draw, average FICO credit report score for the underlying collateral, average LTV for the underlying collateral and other factors deemed relevant.

On at least an annual basis, the Bank’s internal loan review department analyzes all individual loans with outstanding balances greater than $1 million that are internally classified as “Special Mention,” “Substandard,” “Doubtful” or “Loss.” In addition, on an annual basis, the Bank analyzes a sample of “Pass” rated loans.

The Bank categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, public information, and current economic trends. The Bank also

considers the fair value of the underlying collateral and the strength and willingness of the guarantor(s). The Bank analyzes loans individually, and based on this analysis, establishes a credit risk rating. The Bank uses the following definitions for risk ratings:

Risk Grade 1 — Excellent (Pass): Loans fully secured by liquid collateral, such as certificates of deposit, reputable bank letters of credit, or other cash equivalents; loans fully secured by publicly traded marketable securities where there is no impediment to liquidation; or loans to any publicly held company with a current long-term debt rating of A or better.

Risk Grade 2 — Good (Pass): Loans to businesses that have strong financial statements containing an unqualified opinion from a Certified Public Accounting firm and at least three consecutive years of profits; loans supported by unaudited financial statements containing strong balance sheets, five consecutive years of profits, a five-year satisfactory relationship with the Bank, and key balance sheet and income statement trends that are either stable or positive; loans that are guaranteed or otherwise backed by the full faith and credit of the U.S. government or an agency thereof, such as the Small Business Administration; or loans to publicly held companies with current long-term debt ratings of Baa or better.

Risk Grade 3 — Satisfactory (Pass): Loans supported by financial statements (audited or unaudited) that indicate average or slightly below average risk and having some deficiency or vulnerability to changing economic conditions; loans with some weakness but offsetting features of other support are readily available; loans that are meeting the terms of repayment, but which may be susceptible to deterioration if adverse factors are encountered.

Risk Grade 4 — Satisfactory/Monitored (Pass): Loans in this category are considered to be acceptable credit quality but contain greater credit risk than Satisfactory loans due to weak balance sheets, marginal earnings or cash flow, or other uncertainties. These loans warrant a higher-than-average level of monitoring to ensure that weaknesses do not advance. The level of risk in a Satisfactory/Monitored loan is within acceptable underwriting guidelines so long as the loan is given the proper level of management supervision. All revolving lines of credit will be placed in this category if a borrowing base is to be implemented as a condition of approval for the loan. Lastly, a start-up business venture will receive this rating due to the lack of any historical financial data.

Risk Grade 5 — Special Mention: Loans that possess some credit deficiency or potential weakness that deserves close attention. Such loans pose an unwarranted financial risk that, if not corrected, could weaken the loan by adversely impacting the future repayment ability of the borrower. The key distinctions of a Special Mention classification are that (1) it is indicative of an unwarranted level of risk and (2) credit weaknesses are considered potential and are not defined impairments to the primary source of repayment.

Purchased with Credit Deterioration Loans — Group 1: To the extent that a PCD, formerly PCI, loan’s performance does not reflect an increased risk of loss of contractual principal beyond the ACLL established as part of its initial day-one evaluation, such loan would be classified in the PCD-1 category, whose credit risk is considered by management equivalent to a non-PCD “Special Mention” loan within the Bank’s credit rating matrix.

Purchased with Credit Deterioration Loans — Substandard: If during the Bank’s periodic evaluations of its PCD, formerly PCI, loan portfolio, management deems a PCD-1 loan to have an increased risk of loss of contractual principal beyond the ACLL established as part of its initial day-one evaluation, such loan would be classified PCD-Sub within the Bank’s credit risk matrix. Management deems the risk of default and overall credit risk of a PCD-Sub loan to be greater than a PCD-1 loan and more analogous to a non-PCD “Substandard” loan within the Bank’s credit rating matrix.

Risk Grade 6 — Substandard: One or more of the following characteristics may be exhibited in loans classified as Substandard:

●

Loans that possess a defined credit weakness. The likelihood that a loan will be paid from the primary source of repayment is uncertain. Financial deterioration is under way and very close attention is warranted to ensure that the loan is collected without loss.

●

Loans are inadequately protected by the current net worth and paying capacity of the obligor.

●

The primary source of repayment is gone, and the Bank is forced to rely on a secondary source of repayment, such as collateral liquidation or guarantees.

●

Loans have a distinct possibility that the Bank will sustain some loss if deficiencies are not corrected.

●

Unusual courses of action are needed to maintain a high probability of repayment.

●

The borrower is not generating enough cash flow to repay loan principal; however, it continues to make interest payments.

●

The Bank is forced into a subordinated or unsecured position due to flaws in documentation.

●

The Bank is seriously contemplating foreclosure or legal action due to the apparent deterioration in the loan.

●

There is significant deterioration in market conditions to which the borrower is highly vulnerable.

Risk Grade 7 — Doubtful: One or more of the following characteristics may be present in loans classified as Doubtful:

●

Loans have all of the weaknesses of those classified as Substandard. However, based on existing conditions, these weaknesses make full collection of principal highly improbable.

●

The primary source of repayment is gone, and there is considerable doubt as to the quality of the secondary source of repayment.

●

The possibility of loss is high but because of certain important pending factors, which may strengthen the loan, loss classification is deferred until the exact status of repayment is known.

Risk Grade 8 — Loss: Loans are considered uncollectible and of such little value that continuing to carry them as assets is not feasible. Loans will be classified “Loss” when it is neither practical nor desirable to defer writing off or reserving all or a portion of a basically worthless asset, even though partial recovery may be possible at some time in the future.

For all real estate and consumer loans, including small-dollar RPG loans, which do not meet the scope above, the Bank uses a grading system based on delinquency and nonaccrual status. Loans that are 80 days or more past due or on nonaccrual are graded Substandard. Occasionally, a real estate loan below scope may be graded as “Special Mention” or “Substandard” if the loan is cross-collateralized with a classified C&I or CRE loan.

Amid the COVID-19 pandemic the Bank has granted loan deferral and forbearance relief to many retail mortgage loans. As loans under such relief will generally not reflect slow pay, retail mortgage clients requesting loan deferral and forbearance relief beyond six consecutive months may be scrutinized and adversely classified. Mortgage loans adversely classified following prolonged deferral or forbearance relief will be monitored for at least six consecutive months before qualifying to exit adverse classification.

Purchased loans are accounted for as any other Bank-originated loan, potentially becoming nonaccrual, as well as being risk rated under the Bank’s standard practices and procedures. In addition, these loans are considered in the determination of the ACLL once day-one fair values are final.

Management separately monitors PCD, formerly PCI, loans and no less than quarterly reviews them against the factors and assumptions used in determining day-one fair values. In addition to its quarterly evaluation, a PCD loan is typically reviewed when it is modified or extended, or when information becomes available to the Bank that provides additional insight regarding the loan’s performance, the status of the borrower, or the quality or value of the underlying collateral.

If a troubled debt restructuring is performed on a PCD loan, the loan is transferred out of the PCD population. The loan may require an additional Provision if its restructured cash flows are less than management’s initial day-one expectations. PCD loans for which the Bank simply chooses to extend the maturity date are generally not considered TDRs and remain in the PCD population.

The following tables include loans by segment, risk category, and, for non-revolving loans, origination year. Regarding origination year, loan extensions and renewals are generally considered originated in the year extended or renewed unless the loan is classified as a TDR. Loan extensions and renewals classified as TDRs generally receive no change in origination date upon extension or renewal.


											Revolving Loans		Revolving Loans
(in thousands)	Term Loans Amortized Cost Basis by Origination Year										Amortized		Converted
As of December 31, 2021	2021		2020		2019		2018		Prior		Cost Basis		to Term		Total

Residential real estate owner occupied:
Risk Rating
Pass or not rated	$	218,981	$	213,010	$	89,186	$	50,301	$	226,852	$	—	$	—	$	798,330
Special Mention		301		—		—		33		8,209		—		—		8,543
Substandard		45		870		679		1,189		11,075		—		—		13,858
Doubtful		—		—		—		—		—		—		—		—
Total	$	219,327	$	213,880	$	89,865	$	51,523	$	246,136	$	—	$	—	$	820,731

Residential real estate nonowner occupied:
Risk Rating
Pass or not rated	$	107,041	$	65,947	$	44,376	$	29,292	$	55,872	$	—	$	3,568	$	306,096
Special Mention		—		—		—		—		132		—		—		132
Substandard		—		—		—		—		95		—		—		95
Doubtful		—		—		—		—		—		—		—		—
Total	$	107,041	$	65,947	$	44,376	$	29,292	$	56,099	$	—	$	3,568	$	306,323

Commercial real estate:
Risk Rating
Pass or not rated	$	487,669	$	260,182	$	156,748	$	94,212	$	286,223	$	—	$	82,158	$	1,367,192
Special Mention		20,059		2,399		29,639		11,207		18,778		—		—		82,082
Substandard		—		111		266		2,453		3,905		—		—		6,735
Doubtful		—		—		—		—		—		—		—		—
Total	$	507,728	$	262,692	$	186,653	$	107,872	$	308,906	$	—	$	82,158	$	1,456,009

Construction and land development:
Risk Rating
Pass or not rated	$	89,078	$	32,046	$	2,599	$	1,155	$	265	$	—	$	—	$	125,143
Special Mention		—		524		3,670		—		—		—		—		4,194
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total	$	89,078	$	32,570	$	6,269	$	1,155	$	265	$	—	$	—	$	129,337

Commercial and industrial:
Risk Rating
Pass or not rated	$	150,820	$	44,481	$	59,186	$	18,110	$	44,972	$	—	$	2,541	$	320,110
Special Mention		15,365		1,921		785		34		1,956		—		—		20,061
Substandard		—		13		179		—		—		—		—		192
Doubtful		—		—		—		—		—		—		—		—
Total	$	166,185	$	46,415	$	60,150	$	18,144	$	46,928	$	—	$	2,541	$	340,363

Paycheck Protection Program:
Risk Rating
Pass or not rated	$	40,607	$	15,407	$	—	$	—	$	—	$	—	$	—	$	56,014
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total	$	40,607	$	15,407	$	—	$	—	$	—	$	—	$	—	$	56,014

Lease financing receivables:
Risk Rating
Pass or not rated	$	2,638	$	839	$	2,641	$	1,264	$	1,255	$	—	$	—	$	8,637
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total	$	2,638	$	839	$	2,641	$	1,264	$	1,255	$	—	$	—	$	8,637

Aircraft:
Risk Rating
Pass or not rated	$	65,886	$	43,301	$	22,933	$	9,119	$	1,655	$	—	$	—	$	142,894
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total	$	65,886	$	43,301	$	22,933	$	9,119	$	1,655	$	—	$	—	$	142,894

Home equity:
Risk Rating
Pass or not rated	$	—	$	—	$	—	$	—	$	—	$	208,429	$	—	$	208,429
Special Mention		—		—		—		—		—		279		—		279
Substandard		—		—		—		—		—		1,870		—		1,870
Doubtful		—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	210,578	$	—	$	210,578


											Revolving Loans		Revolving Loans
(in thousands)	Term Loans Amortized Cost Basis by Origination Year (Continued)										Amortized		Converted
As of December 31, 2021	2021		2020		2019		2018		Prior		Cost Basis		to Term		Total

Consumer:
Risk Rating
Pass or not rated	$	978	$	417	$	4,694	$	4,326	$	5,768	$	14,613	$	—	$	30,796
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		22		61		194		—		—		277
Doubtful		—		—		—		—		—		—		—		—
Total	$	978	$	417	$	4,716	$	4,387	$	5,962	$	14,613	$	—	$	31,073

Warehouse:
Risk Rating
Pass or not rated	$	—	$	—	$	—	$	—	$	—	$	850,550	$	—	$	850,550
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	850,550	$	—	$	850,550

TRS:
Risk Rating
Pass or not rated	$	—	$	—	$	—	$	—	$	—	$	50,987	$	—	$	50,987
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	50,987	$	—	$	50,987

RCS:
Risk Rating
Pass or not rated	$	5,524	$	3,409	$	1,642	$	869	$	3,699	$	77,544	$	—	$	92,687
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		379		—		379
Doubtful		—		—		—		—		—		—		—		—
Total	$	5,524	$	3,409	$	1,642	$	869	$	3,699	$	77,923	$	—	$	93,066

Grand Total:
Risk Rating
Pass or not rated	$	1,169,222	$	679,039	$	384,005	$	208,648	$	626,561	$	1,202,123	$	88,267	$	4,357,865
Special Mention		35,725		4,844		34,094		11,274		29,075		279		—		115,291
Substandard		45		994		1,146		3,703		15,269		2,249		—		23,406
Doubtful		—		—		—		—		—		—		—		—
Grand Total	$	1,204,992	$	684,877	$	419,245	$	223,625	$	670,905	$	1,204,651	$	88,267	$	4,496,562


											Revolving Loans		Revolving Loans
(in thousands)	Term Loans Amortized Cost Basis by Origination Year										Amortized		Converted
As of December 31, 2020	2020		2019		2018		2017		Prior		Cost Basis		to Term		Total

Residential real estate owner occupied:
Risk Rating
Pass or not rated	$	268,313	$	132,018	$	82,754	$	67,430	$	301,366	$	—	$	—	$	851,881
Special Mention		—		364		42		1,610		8,730		—		—		10,746
Substandard		394		1,423		1,331		614		13,411		—		—		17,173
Doubtful		—		—		—		—		—		—		—		—
Total	$	268,707	$	133,805	$	84,127	$	69,654	$	323,507	$	—	$	—	$	879,800

Residential real estate nonowner occupied:
Risk Rating
Pass or not rated	$	73,291	$	63,102	$	43,610	$	45,759	$	38,316	$	—	$	621	$	264,699
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		81		—		—		81
Doubtful		—		—		—		—		—		—		—		—
Total	$	73,291	$	63,102	$	43,610	$	45,759	$	38,397	$	—	$	621	$	264,780

Commercial real estate:
Risk Rating
Pass or not rated	$	315,550	$	258,251	$	166,542	$	171,207	$	315,336	$	—	$	55,949	$	1,282,835
Special Mention		3,397		30,969		236		11,355		9,659		—		—		55,616
Substandard		2,596		349		—		987		3,899		—		2,803		10,634
Doubtful		—		—		—		—		—		—		—		—
Total	$	321,543	$	289,569	$	166,778	$	183,549	$	328,894	$	—	$	58,752	$	1,349,085

Construction and land development:
Risk Rating
Pass or not rated	$	53,972	$	31,756	$	7,840	$	701	$	1,964	$	—	$	—	$	96,233
Special Mention		—		2,397		—		—		—		—		—		2,397
Substandard		—		44		—		—		—		—		—		44
Doubtful		—		—		—		—		—		—		—		—
Total	$	53,972	$	34,197	$	7,840	$	701	$	1,964	$	—	$	—	$	98,674

Commercial and industrial:
Risk Rating
Pass or not rated	$	105,985	$	84,575	$	33,391	$	32,303	$	46,697	$	—	$	1,040	$	303,991
Special Mention		18,195		800		—		—		2,215		—		—		21,210
Substandard		383		12		—		—		—		—		—		395
Doubtful		—		—		—		—		—		—		—		—
Total	$	124,563	$	85,387	$	33,391	$	32,303	$	48,912	$	—	$	1,040	$	325,596


											Revolving Loans		Revolving Loans
(in thousands)	Term Loans Amortized Cost Basis by Origination Year (Continued)										Amortized		Converted
As of December 31, 2020	2020		2019		2018		2017		Prior		Cost Basis		to Term		Total

Paycheck Protection Program:
Risk Rating
Pass or not rated	$	392,319	$	—	$	—	$	—	$	—	$	—	$	—	$	392,319
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total	$	392,319	$	—	$	—	$	—	$	—	$	—	$	—	$	392,319

Lease financing receivables:
Risk Rating
Pass or not rated	$	1,117	$	3,663	$	1,814	$	2,847	$	689	$	—	$	—	$	10,130
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total	$	1,117	$	3,663	$	1,814	$	2,847	$	689	$	—	$	—	$	10,130

Aircraft:
Risk Rating
Pass or not rated	$	55,823	$	30,529	$	13,804	$	1,219	$	—	$	—	$	—	$	101,375
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total	$	55,823	$	30,529	$	13,804	$	1,219	$	—	$	—	$	—	$	101,375

Home equity:
Risk Rating
Pass or not rated	$	—	$	—	$	—	$	—	$	—	$	237,633	$	—	$	237,633
Special Mention		—		—		—		—		—		127		—		127
Substandard		—		—		—		—		—		2,880		—		2,880
Doubtful		—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	240,640	$	—	$	240,640
Consumer:
Risk Rating
Pass or not rated	$	425	$	13,636	$	8,563	$	7,125	$	8,648	$	14,321	$	—	$	52,718
Special Mention		—		—		—		—		5		—		—		5
Substandard		—		32		49		229		212		5		—		527
Doubtful		—		—		—		—		—		—		—		—
Total	$	425	$	13,668	$	8,612	$	7,354	$	8,865	$	14,326	$	—	$	53,250

Warehouse:
Risk Rating
Pass or not rated	$	—	$	—	$	—	$	—	$	—	$	962,796	$	—	$	962,796
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	962,796	$	—	$	962,796

TRS:
Risk Rating
Pass or not rated	$	—	$	—	$	—	$	—	$	—	$	23,765	$	—	$	23,765
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	23,765	$	—	$	23,765

RCS:
Risk Rating
Pass or not rated	$	27,683	$	5,704	$	2,485	$	1,232	$	19,095	$	54,348	$	—	$	110,547
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		346		—		346
Doubtful		—		—		—		—		—		—		—		—
Total	$	27,683	$	5,704	$	2,485	$	1,232	$	19,095	$	54,694	$	—	$	110,893

Grand Total:
Risk Rating
Pass or not rated	$	1,294,478	$	623,234	$	360,803	$	329,823	$	732,111	$	1,292,863	$	57,610	$	4,690,922
Special Mention		21,592		34,530		278		12,965		20,609		127		—		90,101
Substandard		3,373		1,860		1,380		1,830		17,603		3,231		2,803		32,080
Doubtful		—		—		—		—		—		—		—		—
Grand Total	$	1,319,443	$	659,624	$	362,461	$	344,618	$	770,323	$	1,296,221	$	60,413	$	4,813,103

Subprime Lending

Both the Traditional Banking segment and the RCS segment of the Company have certain classes of loans that are considered to be “subprime” strictly due to the credit score of the borrower at the time of origination.

Traditional Bank loans considered subprime totaled approximately $48 million and $52 million as of December 31, 2021 and 2020. Approximately $28 million and $27 million of the outstanding Traditional Bank subprime loan portfolio as of December 31, 2021 and 2020 were originated for CRA purposes. Management does not consider these loans to possess significantly higher credit risk due to other underwriting qualifications.

The RCS segment originates two short-term line-of-credit products, with the second product introduced in January 2021. The Bank sells 90% to 95% of the balances maintained through these products within three days of loan origination and retains a 5% to 10% interest. These products are unsecured and made to borrowers with subprime or near prime credit scores. The aggregate outstanding balance held-for-investment for these products totaled $26 million and $18 million as of December 31, 2021 and 2020.

Allowance for Credit Losses

The following tables present the activity in the ACLL by portfolio class for the years ended December 31, 2021, 2020, and 2019:


	ACLL Rollforward
	Years Ended December 31,
	2021										2020
	Beginning				Charge-				Ending			Beginning	ASC 326				Charge-				Ending
(in thousands)	Balance		Provision		offs		Recoveries		Balance			Balance	Adoption		Provision		offs		Recoveries		Balance

Traditional Banking:
Residential real estate:
Owner occupied	$	9,715	$	(1,461)	$	—	$	393	$	8,647	$	4,729	$	4,199	$	785	$	(169)	$	171	$	9,715
Nonowner occupied		2,466		231		—		3		2,700		1,737		148		570		—		11		2,466
Commercial real estate		23,606		509		(428)		82		23,769		10,486		273		13,170		(795)		472		23,606
Construction & land development		3,274		854		—		—		4,128		2,152		1,447		(325)		—		—		3,274
Commercial & industrial		2,797		700		(86)		76		3,487		2,882		(1,318)		1,421		(310)		122		2,797
Paycheck Protection Program		—		—		—		—		—		—		—		—		—		—		—
Lease financing receivables		106		(15)		—		—		91		147		—		(41)		—		—		106
Aircraft		253		104		—		—		357		176		—		77		—		—		253
Home equity		4,990		(874)		(51)		46		4,111		2,721		1,652		516		(14)		115		4,990
Consumer:
Credit cards		929		107		(163)		61		934		1,020		33		111		(295)		60		929
Overdrafts		587		425		(641)		312		683		1,169		—		79		(886)		225		587
Automobile loans		399		(233)		(19)		39		186		612		(7)		(176)		(60)		30		399
Other consumer		577		(254)		(72)		63		314		374		307		(57)		(240)		193		577
Total Traditional Banking		49,699		93		(1,460)		1,075		49,407		28,205		6,734		16,130		(2,769)		1,399		49,699
Warehouse lines of credit		2,407		(281)		—		—		2,126		1,794		—		613		—		—		2,407
Total Core Banking		52,106		(188)		(1,460)		1,075		51,533		29,999		6,734		16,743		(2,769)		1,399		52,106

Republic Processing Group:
Tax Refund Solutions:
Easy Advances		—		6,723		(10,256)		3,533		—		—		—		13,033		(19,575)		6,542		—
Other TRS loans		158		(40)		(51)		29		96		234		—		156		(234)		2		158
Republic Credit Solutions		8,803		8,444		(4,707)		408		12,948		13,118		—		1,219		(6,163)		629		8,803
Total Republic Processing Group		8,961		15,127		(15,014)		3,970		13,044		13,352		—		14,408		(25,972)		7,173		8,961

Total	$	61,067	$	14,939	$	(16,474)	$	5,045	$	64,577	$	43,351	$	6,734	$	31,151	$	(28,741)	$	8,572	$	61,067


	ACLL Rollforward
	Year Ended December 31, 2019
	Beginning		Provision		Charge-				Ending
(in thousands)	Balance		for Credit Loss		offs		Recoveries		Balance

Traditional Banking:
Residential real estate:
Owner occupied	$	6,035	$	(1,087)	$	(610)	$	391	$	4,729
Nonowner occupied		1,662		125		(73)		23		1,737
Commercial real estate		10,030		1,859		(1,407)		4		10,486
Construction & land development		2,555		(403)		—		—		2,152
Commercial & industrial		2,873		1,505		(1,505)		9		2,882
Lease financing receivables		158		(11)		—		—		147
Aircraft		91		85		—		—		176
Home equity		3,477		(764)		(64)		72		2,721
Consumer:
Credit cards		1,140		226		(402)		56		1,020
Overdrafts		1,102		1,155		(1,310)		222		1,169
Automobile loans		724		(42)		(79)		9		612
Other consumer		500		(204)		(263)		341		374
Total Traditional Banking		30,347		2,444		(5,713)		1,127		28,205
Warehouse lines of credit		1,172		622		—		—		1,794
Total Core Banking		31,519		3,066		(5,713)		1,127		29,999

Republic Processing Group:
Tax Refund Solutions:
Easy Advances		—		10,643		(13,425)		2,782		—
Other TRS loans		107		606		(692)		213		234
Republic Credit Solutions		13,049		11,443		(12,566)		1,192		13,118
Total Republic Processing Group		13,156		22,692		(26,683)		4,187		13,352

Total	$	44,675	$	25,758	$	(32,396)	$	5,314	$	43,351

The cumulative loss rate used as the basis for the estimate of the Company’s ACLL as of December 31, 2021 was primarily based on a static pool analysis of each of the Company’s loan pools using the Company’s loss experience from 2013 through 2020, supplemented by qualitative factor adjustments for current and forecasted conditions. The Company employs one-year forecasts of unemployment and CRE values within its ACLL model, with reversion to long-term averages following the forecasted period. The cumulative loss rate within the Company’s ACLL also includes estimated losses based on an individual evaluation of loans which are either collateral dependent or which do not share risk characteristics with pooled loans, e.g., TDRs.

For its CRE loan pool, the Company employed a one-year forecast of CRE vacancy rates through March 31, 2021 but discontinued use of this forecast during the second quarter of 2021 in favor of a one-year forecast of general CRE values. This change in forecast method had no material impact on the Company’s ACLL.

Nonperforming Loans and Nonperforming Assets

Detail of nonperforming loans and nonperforming assets and select credit quality ratios follows:


December 31, (in thousands)	2021			2020

Loans on nonaccrual status*	$	20,504		$	23,548
Loans past due 90-days-or-more and still on accrual**		48			47
Total nonperforming loans		20,552			23,595
Other real estate owned		1,792			2,499
Total nonperforming assets	$	22,344		$	26,094

Credit Quality Ratios - Total Company:

Nonperforming loans to total loans		0.46	%		0.49	%
Nonperforming assets to total loans (including OREO)		0.50			0.54
Nonperforming assets to total assets		0.37			0.42

Credit Quality Ratios - Core Bank:

Nonperforming loans to total loans		0.47	%		0.50	%
Nonperforming assets to total loans (including OREO)		0.51			0.56
Nonperforming assets to total assets		0.40			0.45

*Loans on nonaccrual status include collateral-dependent loans.

**Loans past due 90-days-or-more and still accruing consist of smaller balance consumer loans.

The following table presents the recorded investment in nonaccrual loans and loans past due 90-days-or-more and still on accrual by class of loans:


					Past Due 90-Days-or-More
	Nonaccrual				and Still Accruing Interest*
December 31, (in thousands)	2021		2020		2021		2020

Traditional Banking:
Residential real estate:
Owner occupied	$	12,039	$	14,328	$	—	$	—
Nonowner occupied		95		81		—		—
Commercial real estate		6,557		6,762		—		—
Construction & land development		—		—		—		—
Commercial & industrial		13		55		—		—
Paycheck Protection Program				—		—
Lease financing receivables		—		—		—		—
Aircraft				—		—
Home equity		1,700		2,141		—		—
Consumer:
Credit cards		—		—		—		5
Overdrafts		—		—		1		—
Automobile loans		97		170		—		—
Other consumer		3		11		—		—
Total Traditional Banking		20,504		23,548		1		5
Warehouse lines of credit		—		—		—		—
Total Core Banking		20,504		23,548		1		5

Republic Processing Group:
Tax Refund Solutions:
Easy Advances		—		—		—		—
Other TRS loans		—		—		—		—
Republic Credit Solutions		—		—		47		42
Total Republic Processing Group		—		—		47		42

Total	$	20,504	$	23,548	$	48	$	47

* Loans past due 90-days-or-more and still accruing consist of smaller balance consumer loans.


							Year Ended
	As of December 31, 2021						December 31, 2021
	Nonaccrual		Nonaccrual		Total		Interest Income
	Loans with		Loans without		Nonaccrual		Recognized
(in thousands)	ACLL		ACLL		Loans		on Nonaccrual Loans*

Residential real estate:
Owner occupied	$	1,944	$	10,095	$	12,039	$	874
Nonowner occupied		31		64		95		6
Commercial real estate		4,105		2,452		6,557		154
Construction & land development		—		—		—		—
Commercial & industrial		—		13		13		3
Paycheck Protection Program		—		—		—		—
Lease financing receivables		—		—		—		—
Aircraft		—		—		—		—
Home equity		—		1,700		1,700		152
Consumer		17		83		100		10
Total	$	6,097	$	14,407	$	20,504	$	1,199

* Includes interest income for loans on nonaccrual loans as of the beginning of the period that were paid off during the period.


							Year Ended
	As of December 31, 2020						December 31, 2020
	Nonaccrual		Nonaccrual		Total		Interest Income
	Loans with		Loans without		Nonaccrual		Recognized
(in thousands)	ACLL		ACLL		Loans		on Nonaccrual Loans*

Residential real estate:
Owner occupied	$	1,995	$	12,333	$	14,328	$	824
Nonowner occupied		8		73		81		11
Commercial real estate		576		6,186		6,762		857
Construction & land development		—		—		—		—
Commercial & industrial		—		55		55		17
Paycheck Protection Program		—		—		—		—
Lease financing receivables		—		—		—		—
Aircraft		—		—		—		—
Home equity		91		2,050		2,141		94
Consumer		69		112		181		13
	$	2,739	$	20,809	$	23,548	$	1,816

* Includes interest income for loans on nonaccrual as of the beginning of the period that were paid off during the period.

Nonaccrual loans and loans past due 90-days-or-more and still on accrual include both smaller balance, primarily retail, homogeneous loans. Nonaccrual loans are typically returned to accrual status when all the principal and interest amounts contractually due are brought current and held current for six consecutive months and future contractual payments are reasonably assured. TDRs on nonaccrual status are reviewed for return to accrual status on an individual basis, with additional consideration given to performance under the modified terms.

Delinquent Loans

The following tables present the aging of the recorded investment in loans by class of loans:

30 - 59

60 - 89

90 or More

December 31, 2021

Days

Total

(dollars in thousands)

Delinquent

Delinquent*

Delinquent**

Current

Total

Traditional Banking:

Residential real estate:

Owner occupied

606

383

610

1,599

819,132

820,731

Nonowner occupied

—

306,323

Commercial real estate

—

5,292

1,450,717

1,456,009

Construction & land development

—

129,337

Commercial & industrial

—

340,342

340,363

Paycheck Protection Program

—

56,014

Lease financing receivables

—

8,637

Aircraft

—

142,894

Home equity

241

314

210,264

210,578

Consumer:

Credit cards

—

14,480

14,510

Overdrafts

160

164

519

683

Automobile loans

—

14,439

14,448

Other consumer

—

1,431

1,432

Total Traditional Banking

832

432

6,166

7,430

3,494,529

3,501,959

Warehouse lines of credit

—

850,550

Total Core Banking

832

432

6,166

7,430

4,345,079

4,352,509

Republic Processing Group:

Tax Refund Solutions:

Easy Advances

—

Other TRS loans

—

50,987

Republic Credit Solutions

5,010

978

6,035

87,031

93,066

Total Republic Processing Group

5,010

978

6,035

138,018

144,053

Total

5,842

1,410

6,213

13,465

4,483,097

4,496,562

Delinquency ratio***

0.13

0.03

0.14

0.30

*All loans past due 90-days-or-more, excluding small balance consumer loans, were on nonaccrual status.

**Delinquent status may be determined by either the number of days past due or number of payments past due.

***Represents total loans 30-days-or-more past due by aging category divided by total loans.


	30 - 59			60 - 89			90 or More
December 31, 2020	Days			Days			Days			Total			Total
(dollars in thousands)	Delinquent			Delinquent			Delinquent*			Delinquent**			Current		Total

Traditional Banking:
Residential real estate:
Owner occupied	$	1,038		$	668		$	1,554		$	3,260		$	876,540	$	879,800
Nonowner occupied		—			—			—			—			264,780		264,780
Commercial real estate		—			348			5,109			5,457			1,343,628		1,349,085
Construction & land development		—			—			—			—			98,674		98,674
Commercial & industrial		—			—			12			12			325,584		325,596
Paycheck Protection Program		—			—			—			—			392,319		392,319
Lease financing receivables		—			—			—			—			10,130		10,130
Aircraft		—			—			—			—			101,375		101,375
Home equity		93			14			595			702			239,938		240,640
Consumer:
Credit cards		33			35			5			73			14,123		14,196
Overdrafts		140			5			2			147			440		587
Automobile loans		42			—			14			56			30,244		30,300
Other consumer		6			—			—			6			8,161		8,167
Total Traditional Banking		1,352			1,070			7,291			9,713			3,705,936		3,715,649
Warehouse lines of credit		—			—			—			—			962,796		962,796
Total Core Banking		1,352			1,070			7,291			9,713			4,668,732		4,678,445

Republic Processing Group:
Tax Refund Solutions:
Easy Advances		—			—			—			—			—		—
Other TRS loans		—			—			—			—			23,765		23,765
Republic Credit Solutions		6,572			3,620			42			10,234			100,659		110,893
Total Republic Processing Group		6,572			3,620			42			10,234			124,424		134,658

Total	$	7,924		$	4,690		$	7,333		$	19,947		$	4,793,156	$	4,813,103
Delinquency ratio***		0.16	%		0.10	%		0.15	%		0.41	%

*All loans past due 90 days-or-more, excluding small-dollar consumer loans, were on nonaccrual status.

**Delinquent status may be determined by either the number of days past due or number of payments past due.

***Represents total loans 30-days-or-more past due divided by total loans.

Collateral-Dependent Loans

The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of December 31, 2021 and 2020:


	December 31, 2021				December 31, 2020
	Secured		Secured		Secured		Secured
	by Real		by Personal		by Real		by Personal
(in thousands)	Estate		Property		Estate		Property

Traditional Banking:
Residential real estate:
Owner occupied	$	14,798	$	—	$	17,212	$	—
Nonowner occupied		95		—		81		—
Commercial real estate		6,736		—		10,205		—
Construction & land development		—		—		—		—
Commercial & industrial		—		192		—		12
Paycheck Protection Program		—		—		—		—
Lease financing receivables		—		—		—		—
Aircraft		—		—		—		—
Home equity		1,976		—		2,899		—
Consumer		—		274		—		237
Total Traditional Banking	$	23,605	$	466	$	30,397	$	249

Collateral-dependent loans are generally secured by real estate or personal property. If there is insufficient collateral value to secure the Company’s recorded investment in these loans, they are charged down to collateral value less estimated selling cost, when selling costs are applicable. Selling costs range from 10%-13%, with those percentages based on annual studies performed by the Company.

Impaired Loans

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2019. The difference between the “Unpaid Principal Balance” and “Recorded Investment” columns represents life-to-date partial write downs/charge-offs taken on individual impaired credits.


	As of						Year Ended
	December 31, 2019						December 31, 2019
											Cash Basis
	Unpaid						Average		Interest		Interest
	Principal		Recorded		Allocated		Recorded		Income		Income
(in thousands)	Balance		Investment		ACLL		Investment		Recognized		Recognized

Impaired loans with no allocated ACLL:
Residential real estate:
Owner occupied	$	14,768	$	13,893	$	—	$	12,655	$	191	$	—
Nonowner occupied		1,515		1,448		—		1,425		57		—
Commercial real estate		15,028		12,547		—		7,514		298		—
Construction & land development		198		198		—		65		2		—
Commercial & industrial		3,308		1,792		—		913		35		—
Lease financing receivables		—		—		—		—		—		—
Aircraft		—		—		—		—		—		—
Home equity		3,107		3,023		—		2,140		75		—
Consumer		206		160		—		76		4		—
Impaired loans with allocated ACLL:
Residential real estate:
Owner occupied		12,954		12,911		1,392		13,824		502		—
Nonowner occupied		—		—		—		108		—		—
Commercial real estate		3,228		3,228		432		3,624		151		—
Construction & land development		—		—		—		30		—		—
Commercial & industrial		197		197		22		2,054		3		—
Lease financing receivables		—		—		—		—		—		—
Aircraft		—		—		—		—		—		—
Home equity		263		263		174		417		8		—
Consumer		701		690		492		555		16		—
Total impaired loans	$	55,473	$	50,350	$	2,512	$	45,400	$	1,342	$	—

Troubled Debt Restructurings

A TDR is a situation where, due to a borrower’s financial difficulties, the Bank grants a concession to the borrower that the Bank would not otherwise have considered. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of their debt in the foreseeable future without the modification. This evaluation is performed in accordance with the Bank’s internal underwriting policy.

The majority of the Bank’s commercial-related and construction TDRs involve a restructuring of financing terms, such as a reduction in the payment amount to require only interest and escrow (if required) and/or extending the maturity date of the debt. The substantial majority of the Bank’s residential real estate TDR concessions involve reducing the client’s loan payment through a rate reduction for a set period based on the borrower’s ability to service the modified loan payment. Retail loans may also be classified as TDRs due to legal modifications, such as bankruptcies.

Nonaccrual loans modified as TDRs typically remain on nonaccrual status and continue to be reported as nonperforming loans for a minimum of six consecutive months. Accruing loans modified as TDRs are evaluated for nonaccrual status based on a current evaluation of the borrower’s financial condition and ability and willingness to service the modified debt. As of December 31, 2021 and 2020, $6 million and $7 million of TDRs were on nonaccrual status.

Detail of TDRs differentiated by loan type and accrual status follows:

Troubled Debt

Total

Restructurings on

Troubled Debt

Nonaccrual Status

Accrual Status

Restructurings

Number of

Recorded

Number of

Recorded

Number of

Recorded

December 31, 2021 (dollars in thousands)

Loans

Investment

Loans

Investment

Loans

Investment

Residential real estate

3,179

7,856

152

11,035

Commercial real estate

2,575

1,239

3,814

Commercial & industrial

Consumer

2,269

479

2,270

491

Total troubled debt restructurings

5,811

2,361

9,575

2,429

15,386


	Troubled Debt			Troubled Debt			Total
	Restructurings on			Restructurings on			Troubled Debt
	Nonaccrual Status			Accrual Status			Restructurings
	Number of	Recorded		Number of	Recorded		Number of	Recorded
December 31, 2020 (dollars in thousands)	Loans	Investment		Loans	Investment		Loans	Investment
Residential real estate	61	$	4,189	123	$	11,041	184	$	15,230
Commercial real estate	2		2,509	5		2,395	7		4,904
Construction & land development	—		—	1		44	1		44
Commercial & industrial	—		—	1		1	1		1
Consumer	1		14	2,194		585	2,195		599
Total troubled debt restructurings	64	$	6,712	2,324	$	14,066	2,388	$	20,778

The Bank considers a TDR to be performing to its modified terms if the loan is in accrual status and not past due 30 days-or-more as of the reporting date. A summary of the categories of TDR loan modifications outstanding and respective performance under modified terms as of December 31, 2021 and 2020 follows:

Troubled Debt

Restructurings

Total

Performing to

Not Performing to

Troubled Debt

Modified Terms

Restructurings

Number of

Recorded

Number of

Recorded

Number of

Recorded

December 31, 2021 (dollars in thousands)

Loans

Investment

Loans

Investment

Loans

Investment

Residential real estate loans (including home equity loans):

Rate reduction

7,461

303

7,764

Principal deferral

729

—

729

Legal modification

2,100

442

2,542

Total residential TDRs

137

10,290

745

152

11,035

Commercial related and construction/land development loans:

Rate reduction

919

—

919

Principal deferral

477

2,464

2,941

Total commercial TDRs

1,396

2,464

3,860

Consumer loans:

Principal deferral

2,266

470

—

2,266

470

Legal modification

—

Total consumer TDRs

2,270

491

—

2,270

491

Total troubled debt restructurings

2,413

12,177

3,209

2,429

15,386


	Troubled Debt			Troubled Debt
	Restructurings			Restructurings			Total
	Performing to			Not Performing to			Troubled Debt
	Modified Terms			Modified Terms			Restructurings
	Number of	Recorded		Number of	Recorded		Number of	Recorded
December 31, 2020 (dollars in thousands)	Loans	Investment		Loans	Investment		Loans	Investment

Residential real estate loans (including home equity loans):
Interest only payments	1	$	826	—	$	—	1	$	826
Rate reduction	101		9,526	6		370	107		9,896
Principal deferral	9		858	2		166	11		1,024
Legal modification	58		3,068	7		416	65		3,484
Total residential TDRs	169		14,278	15		952	184		15,230

Commercial related and construction/land development loans:
Interest only payments	1		488	—		—	1		488
Rate reduction	2		1,046	1		45	3		1,091
Principal deferral	4		906	1		2,464	5		3,370
Total commercial TDRs	7		2,440	2		2,509	9		4,949

Consumer loans:
Principal deferral	2,193		578	—		—	2,193		578
Legal modification	2		21	—		—	2		21
Total consumer TDRs	2,195		599	—		—	2,195		599

Total troubled debt restructurings	2,371	$	17,317	17	$	3,461	2,388	$	20,778

As of December 31, 2021 and 2020, 79% and 83% of the Bank’s TDR balances were performing according to their modified terms. The Bank had provided $2 million and $1 million of specific reserve allocations to clients whose loan terms have been modified in TDRs as of December 31, 2021 and 2020. The Bank had no commitments to lend any additional material amounts to its existing TDR relationships as of December 31, 2021 and 2020.

A summary of the categories of TDR loan modifications and respective performance as of December 31, 2021, 2020, and 2019 that were modified during the years ended December 31, 2021, 2020, and 2019 follows:


	Troubled Debt			Troubled Debt
	Restructurings			Restructurings			Total
	Performing to			Not Performing to			Troubled Debt
	Modified Terms			Modified Terms			Restructurings
	Number of	Recorded		Number of	Recorded		Number of	Recorded
December 31, 2021 (dollars in thousands)	Loans	Investment		Loans	Investment		Loans	Investment

Residential real estate loans (including home equity loans):
Principal deferral	1	$	159	—	$	—	1	$	159
Legal modification	9		309	5		272	14		581
Total residential TDRs	10		468	5		272	15		740

Commercial related and construction/land development loans:
Principal deferral	2		45	—		—	2		45
Total commercial TDRs	2		45	—		—	2		45

Consumer loans:
Principal deferral	621		92	—		—	621		92
Legal modification	2		4	—		—	2		4
Total consumer TDRs	623		96	—		—	623		96

Total troubled debt restructurings	635	$	609	5	$	272	640	$	881


	Troubled Debt			Troubled Debt
	Restructurings			Restructurings			Total
	Performing to			Not Performing to			Troubled Debt
	Modified Terms			Modified Terms			Restructurings
	Number of	Recorded		Number of	Recorded		Number of	Recorded
December 31, 2020 (dollars in thousands)	Loans	Investment		Loans	Investment		Loans	Investment

Residential real estate loans (including home equity loans):
Rate reduction	2	$	53	1	$	3	3	$	56
Legal modification	15		701	3		131	18		832
Total residential TDRs	17		754	4		134	21		888

Commercial related and construction/land development loans:
Principal deferral	2		133	—		—	2		133
Total commercial TDRs	2		133	—		—	2		133

Consumer loans:
Principal deferral	486		71	—		—	486		71
Legal modification	1		14	—		—	1		14
Total consumer TDRs	487		85	—		—	487		85

Total troubled debt restructurings	506	$	972	4	$	134	510	$	1,106

The tables above are inclusive of loans that were TDRs at the end of previous years and were re-modified, e.g., a maturity date extension during the current year.


	Troubled Debt			Troubled Debt
	Restructurings			Restructurings			Total
	Performing to			Not Performing to			Troubled Debt
	Modified Terms			Modified Terms			Restructurings
	Number of	Recorded		Number of	Recorded		Number of	Recorded
December 31, 2019 (dollars in thousands)	Loans	Investment		Loans	Investment		Loans	Investment

Residential real estate loans (including home equity loans):
Rate reduction	1	$	365	—	$	—	1	$	365
Principal deferral	—		—	—		—	—		—
Legal modification	26		1,958	5		417	31		2,375
Total residential TDRs	27		2,323	5		417	32		2,740

Commercial related and construction/land development loans:
Rate reduction	2		1,423	—		—	2		1,423
Principal deferral	4		3,199	—		—	4		3,199
Legal modification	—		—	2		1,027	2		1,027
Total commercial TDRs	6		4,622	2		1,027	8		5,649

Consumer loans:
Principal deferral	1,279		201	—		—	1,279		201
Legal modification	1		9	—		—	1		9
Total consumer TDRs	1,280		210	—		—	1,280		210

Total troubled debt restructurings	1,313	$	7,155	7	$	1,444	1,320	$	8,599

The table above is inclusive of loans that were TDRs at the end of previous years and were re-modified, e.g., a maturity date extension during the current year.

As of December 31, 2021, 2020, and 2019, 69%, 88% and 83% of the Bank’s TDR balances that occurred during the years ended December 31, 2021, 2020, and 2019 were performing according to their modified terms. The Bank provided approximately $45,000, $48,000 and $220,000 in specific reserve allocations to clients whose loan terms were modified in TDRs during 2021, 2020, and 2019.

There was no significant change between the pre and post modification loan balances as of December 31, 2021, 2020, and 2019.

The following tables present loans by class modified as troubled debt restructurings within the previous 12 months of December 31, 2021, 2020, and 2019 and for which there was a payment default during 2021, 2020, and 2019:



	Years Ended December 31,
	2021			2020			2019
	Number of	Recorded		Number of	Recorded		Number of	Recorded
(dollars in thousands)	Loans	Investment		Loans	Investment		Loans	Investment

Residential real estate:
Owner occupied	5	$	314	5	$	218	4	$	248
Commercial real estate	—		—	—		—	1		541
Commercial & industrial	—		—	—		—	2		1,027
Home equity	1		14	2		32	—		—
Consumer	—		—	—		—	1,279		201

Total	6	$	328	7	$	250	1,286	$	2,017

COVID-19 Loan Accommodations

The CARES Act provided several forms of economic relief designed to defray the impact of COVID-19. In April 2020, through its own independent relief efforts and CARES Act provisions, the Company began offering loan accommodations through deferrals and forbearances. These accommodations were generally under three-month terms for commercial clients, with residential and consumer accommodations in line with prevailing regulatory and legal parameters. Loans that received an accommodation were generally not considered troubled debt restructurings by the Company if such loans were not greater than 30 days past due as of December 31, 2019.

As of December 31, 2021, $2 million, or less than 1% of the Company’s Traditional Bank portfolio remained under a COVID-19 hardship accommodation.

Foreclosures

The following table presents the carrying amount of foreclosed properties held as of December 31, 2021 and 2020 as a result of the Bank obtaining physical possession of such properties:


December 31, (in thousands)	2021		2020

Residential real estate	$	—	$	496
Commercial real estate		1,792		2,003

Total other real estate owned	$	1,792	$	2,499

The following table presents the recorded investment in consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process according to local requirements of the applicable jurisdiction as of December 31, 2021 and 2020:


December 31, (in thousands)	2021		2020

Recorded investment in consumer residential real estate mortgage loans in the process of foreclosure	$	508	$	981

Easy Advances

The Company’s TRS segment offered its EA product during the first two months of 2021, 2020, and 2019. During the first quarter of each year, the Company bases its estimated Provision for EAs on the current year’s EA delinquency information and the prior year’s tax refund payment patterns subsequent to the first quarter. Each year, all unpaid EAs are charged off by June 30^th, and each quarter thereafter, any credits to the Provision for EAs matches the recovery of previously charged-off accounts.

Information regarding EAs follows:


	Years Ended
	December 31,
(dollars in thousands)	2021			2020			2019

Easy Advances originated	$	250,045		$	387,762		$	388,970
Net charge to the Provision for Easy Advances		6,723			13,033			10,643
Provision to total Easy Advances originated		2.69	%		3.36	%		2.74	%
Easy Advances net charge-offs	$	6,723		$	13,033		$	10,643
Easy Advances net charge-offs to total Easy Advances originated		2.69	%		3.36	%		2.74	%